Here’s What It Takes To Make A Living Playing Fantasy Sports

A handful of daily fantasy “sharks” setting lineups in the early morning hours of a trip to Las Vegas A handful of daily fantasy “sharks” setting lineups in the early morning hours of a trip to Las Vegas. Jonathan Bales I've had a couple back-to-back five-figure weeks. I've been a contrarian lately and I was pretty bullish on some underperforming guys, so I had a lot of exposure to a few values that ended up working out in my favor."

Those are the words of Peter Jennings, a Colorado native who used to make his living as a stock trader. He still practices the trader lingo, but these days, Peter is buying and selling stocks of a different sort—professional athletes.

Peter is one of a handful of individuals making a living in the daily fantasy sports industry. The concept is simple: working within the confines of a salary cap, users build a team of players, all of whom have "salaries" set by particular fantasy sites, and accumulate points as they play in real games.

Unlike traditional season-long fantasy sports leagues, though, most daily fantasy sports leagues end in less than 24 hours. Competing against others in real cash games—a legal endeavor since the United States government astutely considers fantasy sports a game of skill—one can put as much or as little time into the games as they'd like. Most newcomers to the daily fantasy sites fill out lineups in a matter of minutes and hope for the best.

Others spend countless hours creating projections, tweaking models, watching film, and constructing lineups. And for Peter and others like him—the industry's elite players known as "sharks"—the end result is quite lucrative.

In the daily fantasy sports world, Peter is the prototype. Affectionately known by his fantasy sports username "CSURAM88" within the fantasy sports community, Peter once made a living playing poker professionally. When the poker industry collapsed, he worked his way into trading before setting his sights on what he considers the best investment opportunity available right now.

"I pretty much knew I wanted to get out of stock trading and into daily fantasy sports right away. I was set to make that move as a player when StarStreet.com (a daily fantasy sports site) asked me to come work for them. And when I won the FFFC in late-2012, it was a nice little incentive to make me feel like I made the right decision."

The "FFFC" is the championship tournament hosted by FanDuel—the industry's largest site—and their "nice little incentive" was a $150,000 grand prize. Competing against 23 others in Las Vegas, Peter won daily fantasy sports' largest single payout in a matter of hours on a single Sunday. He qualified at a buy-in level of just $10.

When you're competing against thousands of other players in a single tournament, part of the outcome—perhaps even most of it—is controlled by luck. But by shifting the odds in their favor, Peter and the other sharks can continually dominate a game that, like poker, is heavily influenced by randomness.

"There's lots of variance, obviously," Peter told me, "but I'm usually profitable around 75 percent of weeks in NFL. And football is the most difficult sport just because the typical user knows so much, so it's a lot easier to profit in NBA or MLB."

And how does this poker player turned stock trader turned daily fantasy sports guru shift the percentages in his favor?

"It's like any investment, really. You're basically just looking to find value where players' salaries are too low relative to their expected production. So obviously there's a lot of math involved with that. I use the Vegas lines a lot in my projections, so that's a really big part of my models."

All of the work—think two full-time jobs worth of it—is paying off. RotoGrinders.com—a site dedicated solely to daily fantasy sports analysis—currently has Peter ranked as the 10th-best player in the world, including No. 7 in NFL and No. 4 in NBA.

Peter isn't the only one transitioning from "the real world" to daily fantasy sports. "TommyG1979"—one of the premiere MLB players in daily fantasy—also works as a trader and "trading mentor." Raking in a salary well into the six figures, Tommy G. is prepared to give up the sure thing for what he considers the opportunity of a lifetime, despite reservations from anyone and everyone around him who isn't involved with daily fantasy sports.

Despite his statistical background and early accomplishments playing daily fantasy sports, Tommy's goal isn't just to make it as a player.

"I'll always play daily fantasy, but my ultimate goal is to take over the industry from the broadcasting perspective. This thing is going to explode, and I want to be the face of fantasy sports. In my current career, my ceiling is pretty much capped. But I don't think that's the case with daily fantasy sports."

Tommy isn't your typical fantasy sports nerd. Although still a self-proclaimed "stat geek," he's also a "former guido"—Bill James meets The Situation. And that dynamic is what Tommy believes can revolutionize daily fantasy sports.

"I have a job that pays well and allows me to travel all over the world, but it's not what I'm passionate about. We didn't have a lot of money when I was growing up, so I just wanted to find a job that could get me rich. But that's not really satisfying."

In reference to his timeline for making the switch, Tommy hints it could be right around the corner. "It was originally going to be the end of next year, but the way things are moving right now, it could be a matter of months. Two months, man."

And what about that high six-figure salary?

"I'm not really worried about it. The pay will sort itself out. I'm just going to keep plugging away, not force it, and figure out a way to make money doing something I love."

It's one thing to depart a well-paying job after saving money to follow your dream. It's another altogether to begin your career as a daily fantasy sports player fresh out of college. But that's one path that Michael McClure, known online as "Mike5754", is strongly considering.

Michael, in his early-20s, attends Kansas State University. The senior mechanical engineering major already has job offers while in college—offers that might never get accepted. And how does Michael find time for daily fantasy research while still maintaining a high GPA in perhaps the university's most challenging major?

"I go to the library between all of my classes. I download all of the salary data and start making projections. I enter most of the projections by hand right now, but I'm working on some models that could really cut down on that."

Michael has swiftly ascended the daily fantasy rankings.

"I began by playing just a couple dollars a night. Really small stuff. And then I started winning more and playing more. I still play really conservatively when you consider my bankroll."

I asked Michael how conservatively he plays, thinking he might occasionally enter leagues with a triple-digit buy-in.

"I play some heads-up for $1,000 now, but everything I do has a mathematical objective. I play a certain percentage each night, selecting my lineups and leagues to optimize my profitability. It's kind of like a part-time investment job right now."

Even with his achievements in the daily fantasy world, Michael seems to be leaning toward the traditional career path to start.

"I think I'll end up accepting a job so that I can save up money to play more daily fantasy. So I'll probably do that for a year or two and then reassess what I want to do. I think that's what I'll do, anyway."

Sounding a bit unsure, I asked Michael how confident he was in that decision.

"Well, we'll see how this NBA season goes."

StarStreet’s 2012 PFBC third place winner with his bevy of beauties, including Pilar Lastra (second from left). Jonathan Bales A poker player, a trader, and a chemical engineering major. Notice any similarities?

But believe it or not, not everyone involved in the daily fantasy sports industry is obsessed with mathematical models. Actually, it's a model of a different type who has really flipped the fantasy nerd stereotype on its head.

Pilar Lastra is a former Playboy Playmate of the Month and one of People magazine's "100 Most Beautiful People" for her work as a model on the television show Deal or No Deal. Not exactly your typical nerd.

And Pilar's not only involved with the media side of fantasy sports. She's a player, too. Within five minutes of talking to her, Pilar expressed her dissatisfaction with one of her sleeper picks.

"Can you believe Davone Bess? I had him in a lot of lineups because Brian Hoyer is starting for Cleveland. They just traded away Richardson, so you'd think they'd want to use the short passing game a lot with the new quarterback. And Bess should have been pretty safe since he's not dependent on big plays for production."

Pilar is used to giving fantasy advice as Miller Lite's fantasy expert and the host of "Every Man's Fantasy" on Sirius XM. But she didn't become heavily focused on daily fantasy sports until daily fantasy sports came to her.

"I was at the Playboy Mansion for StarStreet's Playboy Baseball Championship. They flew out 40 players for their championship party. Honestly, the other girls and I all thought it was kind of going to be lame just because of the preconceptions we had about fantasy sports dorks. It was honestly probably the best party we've ever had there."

With $200,000 on the line, no one even seemed to care all that much about the games being played on the big screens.

"There's never been a Playboy party like that. There was all this money on the line, but people were playing beer pong games for $1,000 and doing backflips off of the grotto into the pool. It was awesome. And that's where I met all of the guys—Peter and Jeremy Levine, the founder of StarStreet, and Tommy and Michael, who both won tickets into the championship. They introduced me more to the daily side of fantasy sports and I've just been hooked ever since."

The daily fantasy industry has grown considerably in recent years, but those involved in it think we haven't seen anything yet. That's an incredible, even seemingly inconceivable thought considering that, by the end of 2013, three people will instantly be made millionaires from daily fantasy sports.

When Peter Jennings took down FanDuel's $150,000 prize in 2012, it was the largest single cash in daily fantasy history. Fast-forward just 12 months, and three sites—FanDuel, DraftKings, and DraftStreet—will each be dishing out a $1 million prize that's over six times anything we've ever seen. Chances are those winners will have entered for $25 or less.

But despite the exorbitant prizes and the unfathomable salaries being earned by some of the top professionals like Peter, the most obvious sign that daily fantasy sports are on the verge of reaching that coveted "tipping point" is the diversity of the sites' users.

"I noticed Saints running back Pierre Thomas plays on StarStreet," Jeremy told me. "He doesn't have any deal with us or anything; he just likes to play. He had one of the highest scores on the site in his first week."

From the former poker pros and stock traders to the mechanical engineering majors to the Playboy playmates to professional athletes, everyone seems to be jumping head-first into the daily fantasy sports craze.

"We're going to be on TV soon," Tommy said. "This is really going to be the next poker boom, so it's a great time to get involved."

"I'm just so bullish on the industry in general," Peter added. "I love the direction it's headed. There are so many different types of players now and it's still growing exponentially."

On a recent Monday morning, I got a call from my father saying he had something important to tell me about my grandfather. Fearing the worst, I hesitantly asked what was wrong.

"He started playing daily fantasy sports this weekend," my dad replied matter-of-factly. "He never played any type of fantasy sports before."